Pm march 01, 2015 by ERIL Publications

01] Front Page -Tractors India Ad.qxp

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Vol.14 No.21

March 1-15, 2015 `100

Pages 20

02-03] Mahindra Trucks Ad + JSW Steel Ad.qxp

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Projectmonitor, Mumbai, March 1-15, 2015

02-03] Mahindra Trucks Ad + JSW Steel Ad.qxp

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Projectmonitor, Mumbai, March 1-15, 2015

04-05] Railway Budget.qxp

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RAILWAY BUDGET

Projectmonitor, Mumbai, March 1-15, 2015

ILLUSTRATION ONLY/WIKIMEDIA COMMONS

PROPOSED INVESTMENT PLAN (2015-2019) (`` crore) Network decongestion (including DFC, electrification, doubling including electrification and traffic facilities)

1,99,320

Network expansion (including electrification)

1,93,000

National projects (northeastern and Kashmir connectivity projects) Safety (track renewal, bridge works, ROB, RUB and signalling and telecom) Information technology and research

Prabhu proposes `8.56 trillion investment DR. M.S. KAPADIA

ailway Budget 2015-16, presented by Railway Minister Suresh Prabhu on February 26, has pegged operating ratio at 88.5 per cent, against 91.8 per cent in 2014-15 and 93.6 per cent for 2013-14. Gross Traffic Receipt is estimated to be `1,83,578 crore

which is a growth of 15.3 per cent. Passenger earning is budgeted to rise by 16.7 per cent to `50,175 crore; freight earning is projected at `121,423 crore, which includes increase due to rationalisation of rates, commodity classification and distance slabs. The budget has not proposed any increase in passenger

fares. Other coaching and sundries are expected to be `4,612 crore and `7,318 crore, respectively. In the meantime, the growth rate in passenger earning during 2014-15 has been scaled down to 17.7 per cent (RE) from 22.2 per cent (BE), keeping in view the persistent negative growth trend, particularly in non-suburban non-

1,27,000 5,000

Rolling stock (locomotives, coaches, wagons – production and maintenance) Passenger amenities High-speed rail and elevated corridor

39,000

1,02,000 12,500 65,000

Station redevelopment and logistic parks

1,00,000

Others Total

13,200 8,56,020

The government will invest more in creating additional freight carrying capacity and (inset) Union Railway Minister Suresh Prabhu. PRS segment of travel. There is a net reduction in Gross Traffic Receipts of `917crore in RE compared to the BE of `1,60,165 crore. No new trains have been announced in the budget but speed of trains under nine railway corridors will be increased. The size of the Railway Plan would go up by a record high

52 per cent from `65,798 crore in 2014-15 to `1,00,011 crore in 2015-16. The central support to the Plan would be `40,000 crore. Market borrowing under EBR is projected at `17,655 crore, internal resources at `17,793 crore and PPP at `5,781 crore.

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Freight capacity to be augmented PM NEWS BUREAU

elcoming the railway minister’s emphasis on creating additional freight carrying capacity through investment, Parikshit Arya, Joint Managing Director, Rhenus Logistics India P Ltd, said, “The proposed Investment Plan (2015-2019), which includes network expansion, national projects like northeastern connectivity, highspeed rail and elevated corridor, and station redevelopment and logistics parks, look promising. These activities, if undertaken in a systematic and timely manner, would definitely give a boost to the logistics sector in particular and economy in general.” Connectivity of airports with

railways would give a boost to the perishable goods sector. This would encourage the use of multimodal transportation and also encourage exports of vegetable and fruits, he noted. The coastal connectivity programme would help to bring down freight rates. Technology upgradation and introduction of services like bar coded and RFID tracking of parcels and freight wagons would definitely encourage more companies to use the railways, he stated. Arya also welcomed the implementation of the two dedicated freight corridor projects and the emphasis on increasing the annual freight carrying capacity from 1 billion tonnes to 1.5 billion tonnes.

‘Much needs to be done for mobility reduced passengers’ — Sminu Jindal, MD, Jindal Saw & Founder Svayam

teps like introduction of Braille enabled coaches and facility of online booking of wheelchairs is a welcome step. This means that the government is thinking about the mobility reduced populace. However, much needs to done at the basic level. Tactile guiding blocks and warning blocks are missing which need to be placed to guide the visually impaired find their way around railway station. So even though there will be Braille markings on the coaches and seats (we hope the seat numbers are included), this alone will not suffice.

The website is still inaccessible to the visually impaired, so as a first step even the website of IRCTC needs to be made accessible. Most railway stations still do not have accessible access to platforms, between platforms and to coaches Public conveniences like accessible toilets are missing. So while it’s good that the minister is focusing on bio-toilets and cleanliness, perhaps he would also focus on accessible toilets in the train and on platforms. There's a lack of visual signage on platforms which is a deterrent for the hearing impaired.

04-05] Railway Budget.qxp

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RAILWAY BUDGET

e are pleased with the overall direction of the railway budget, which stresses on safety, increasing train speeds, outlaying investment opportunities through banks and pension funds, upgrading existing rail infrastructure with increase track capacity, and improving passenger comfort and technology innovations. This budget provides a longterm vision of rail transportation in India with a clear focus on stabilising railways in India and making itself sustainable. This is the first rail budget which has utilised the professional management background of the railway minister outlining nine thrust areas and five drivers for executing strategies with four defined goals to transform Indian Railways in the next five years. The budget reinforces commitment to private sector with stress on public-private partnerships, which is a win-win situation for the private sector and Indian Railways. Bombardier is one of the major global suppliers of electric locomotives and highspeed trains across the world and we are delighted with the prospects of such projects gaining momentum in this budget. Setting up of an infrastructure

‘Emphasis on strategy and action plan’ Tilak Raj Seth, Executive VP Mobility, Siemens Ltd verall, Railway Budget 2015-16 emphasises on an execution strategy and action plan for the transformation of the Railways. I would rate this Railway Budget as very positive, as it would be beneficial for the industry, Siemens businesses and people at large. Demand for railway transportation services is directly linked to the growth in the core infrastructure industries and through this budget, the ministry has made an honest attempt to present a structured blueprint for transformation of the railways. Apart from various measures to improve passenger amenities, increasing safety (Train Protection Warning System) and capacity augmentation in highdensity network areas are welcome. The implementation of key projects, including dedicated freight corridors and high horsepower locomotives, will provide additional opportunities for the industry. PPPprojects will benefit from the operational efficiencies of private sector and domain expertise of the Railways. We are confident of partnering the Indian Railways in their ambitious plans to modernise signalling and safety system, dedicated freight corridors etc.

Projectmonitor, Mumbai, March 1-15, 2015

‘Bombardier is keen on PPP projects’ — Harsh Dhingra, Chief Country Representative, India, Bombardier Transportation fund for raising long-term debt from domestic and overseas sources including pension funds, bilateral and multilateral financial institutions is a step in

the right direction. Mega rail projects require high level of technology and investments. These projects might prove to be significant to

India with technology injection and enabler to economic growth. Emphasis on “Make in India” is ideal for Bombardier Trans-

portation as our large industrial base in India is already manufacturing complete rail equipment for Indian and overseas markets. High horse power and green technology locomotives along with high-speed train sets gives Bombardier an opportunity for enhancing support to ‘Make in India’ initiative. Proposed investment outlay of `856,000 crore will be spent in the next five years and Bombardier will keenly follow projects under rolling stock and signalling systems which represent reasonable portion of the total proposed investment outlay.

06-07] Energy + Transport.qxp

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ENERGY

Projectmonitor, Mumbai, March 1-15, 2015

ILLUSTRATION ONLY/WIKIMEDIA COMMONS

TOP 10 NEW INSTALLED CAPACITY — JANUARY-DECEMBER 2014

India far behind China in

wind energy DEBDEEP CHAKRABORTY

fter going through a rough patch during the last few years, the global wind industry is on the path to recovery. According to the latest global wind statistics released by the Belgium-based Global Wind Energy Council, new wind generating capacity of 51,477 MW was added in 2014 representing 44 per cent increase in the annual market. The global annual installed wind capacity in 2013 was 35,708 MW. At the end of 2014, the global cumulative

installed wind capacity stood at 369,553 MW, up from 318,596 MW in 2013. China continued to drive growth in the sector during 2014. With installation of 23,351 MW of new wind power, the country accounted for 45 per cent of the global annual installed wind capacity and 89 per cent of the Asian market’s total new installations of 26,161 MW last year. India came way behind China in terms of wind capacity addition and managed to install just 2,315 MW of new wind power in 2014. The international trade

Telangana Chief Minister K. Chandrashekar Rao will lay the foundation for the 600-MW coal-fired thermal power project at Jaipur in Adilabad district of the state. The thermal power plant will be set up with a capital outlay of `3,570 crore. It will be completed and commissioned by 2017. This project is in addition to the 1,200MW power plant (2x600) currently being developed by state-owned Singareni Collieries Company Ltd. The first unit of 600 MW is likely to be commissioned later this year and the second unit of like capacity early next year.

body for the wind power industry however said that the stage was now set for a new round of growth in the Indian market. The European market grew marginally with 12,820 MW of new capacity in 2014. Germany, with 5,279 MW of new capacity, accounted for 10 per cent of the global annual installed wind capacity, thereby cementing its position as the European market leader. The US market recovered last year with installations of 4,854 MW new wind power. Besides China, Germany, USA and India, the other countries among the world’s top ten in

Country Capacity (MW) % Share China* 23,351 45.2 Germany 5,279 10.2 USA 4,854 9.4 Brazil** 2,472 4.8 India 2,315 4.5 Canada 1,871 3.6 UK 1,736 3.4 Sweden 1,050 2.0 France 1,042 2.0 Turkey 804 1.6 Rest of the World 6,702 13.0 Total top 10 44,775 87 World Total 51,477 100 Source: GWEC *Provisional figure ** Projects fully commissioned, grid connections pending in some cases terms of new installed wind power capacity during the period January to December 2014 were Brazil (2,472 MW), Cana-

Four in race for Gadarwara transmission schemes ILLUSTRATION ONLY/WWW.GWEC.NET

Dakshinanchal Vidyut Vitran Nigam Ltd has invited tenders for rural electrification works in three districts of Uttar Pradesh. The bids have been invited under the Rajiv Gandhi Grameen Vidyutikaran Yojana’s 12th Five-Year Plan in Etah, Farrukhabad and Mathura districts. The Etah district electrification work is estimated to cost `52.91 crore, Farrukhabad district work `132.04 crore, and Mathura district work is set to cost `113.38 crore. Gulf Petrochem, a leader in oil space and energy business, has commissioned phase-I of its liquid storage terminal at Pipavav Port in Gujarat. Phase-I has a capacity of 1,10,000 kilolitres. Phase-II, which will be commissioned by mid-March 2015, will have a capacity of 1,40,000 kilolitres. The terminal has a total of 46 tanks of different capacities befitting different product requirements for all classes of petroleum products, chemicals, petrochemicals, vegetable oil, lube base oil, fuel oil and bitumen. Gammon India Ltd is likely to start work on the Srinagar-Kargil-Leh transmission line project by June 2015. The company was awarded the contract for Tower Package-TW01 for 220kV S/C Alusteng (Srinagar)-Drass transmission line (Part-I) by PGCIL in August 2014. The contract value is `204.76 crore. The project is part of the Srinagar-Kargil-Leh transmission line project which is estimated to cost `1,840 crore. It envisages laying a 220kV transmission line from Alusteng in Srinagar to Leh via Drass, Kargil and Khalsti in Jammu & Kashmir. The work is expected to be completed by March 2016. Sumeet Industries Ltd, a manufacturer and exporter of polyester yarn, polypropelene yarn and woven fabrics, is going to set up a 10.5-MW wind power plant, envisaging five turbines of 2.1 MW each. The total cost of this project is `77.51 crore. IDBI Bank has already sanctioned `57.75 crore towards it. The wind power unit is expected to become operational within six months.

da (1,871 MW), United Kingdom (1,736 MW), Sweden (1,050 MW), France (1,042 MW) and Turkey (804 MW).

PM NEWS BUREAU

our out of the 11 qualified have submitted their financial bids for the GadarwaraA and Gadarwara-B interregional transmission schemes in Madhya Pradesh. Both the projects are being developed on build, own, operate and maintain (BOOM) basis under the tariff-based competitive bidding mechanism. The two schemes are expected to together cost around `6,000 crore. The four in race are central transmission utility Power Grid Corporation of India Ltd and three private firms—Essel

Infraprojects, Sterlite Grid and Adani Power. The others that had qualified to submit bids but did not do so include L&T Infrastructure Development Projects, CLP India, Kalpataru Power Transmission, Reliance Power Transmission, Isolux Corsan India, and two others. The transmission system strengthening was planned for the evacuation and supply of power from NTPC’s upcoming 2x800-MW Gadarwara super thermal power station in Narsinghpur district of Madhya Pradesh. While Part A & Part B are independent projects, they are envisaged to be imple-

mented concurrently. The key component of the Part A scheme is the 765kV doublecircuit line from Gadarwara STPS to Jabalpur Pooling Station. In Part B, a 765kV doublecircuit line from Warora Pooling Station to Parli and further to Solapur will be the main component. The bid process coordinator for both the projects is Rural Electrification Corporation Ltd. The respective SPVs for the two projects are Gadarwara (A) Transmission Ltd and Gadarwara (B) Transmission Ltd.

PGCIL to market meters ower Grid Corporation of India Ltd will soon be manufacturing and marketing niche electrical equipment. According to R.N. Nayak, CMD, PGCIL, the company would soon be rolling out smart meters under the ‘Power Grid’ brand name. Besides, the company will also be filing a patent for specialized paint. A coating of this paint applied on roofs of buildings, Nayak explained, can offer thermal insulation to buildings thereby reducing electric consumption.

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TRANSPORT & LOGISTICS

Projectmonitor, Mumbai, March 1-15, 2015

ILLUSTRATION ONLY/WIKIMEDIA COMMONS

The EoI document said dedicated passenger terminals would be developed, either by the respective ports or on PPP basis, after identification of key circuits along the coastline and based on passenger potential. Private operators interested in the proposal can submit their EoI at the Ministry of Shipping by February 20, 2015. The EoI should include an assessment of the project providing details such as preferred PPP model/arrangement for operating the service, size of the project (length of passenger terminal, kind of craft and draft

EOI soon for private ferry and cruise service W DEBDEEP CHAKRABORTY

ith a view to ensure fast, efficient and safe passenger transportation in the country’s coastal regions, the Ministry of Shipping recently floated a proposal for introduction of ferry services as well as catamarans, hovercrafts, seaplanes, RO-PAX vessels and passenger cruises by private operators along the coastline. Inviting Expression of Interest from private ferry and cruise operators for point to point services or short circuit voyages, the Ministry of Shipping said

the project could be developed either as per the PPP model or any other model based on the 2005 draft guidelines that major ports need to follow for private sector participation. The EoI document identified Kolkata, Haldia, Paradip, Visakhapatnam, Chennai, Kochi, Mormugao, New Mangalore and Kandla as the preferred locations for initiating the services, but added operators were free to choose any location alongside the coastline and also suitable stretches in the network of inland waterways based on viability and revenue potential.

Centre plans to invest `10 trillion on roads PM NEWS BUREAU

inister for Road Transport and Highways and Shipping Nitin Gadkari has unveiled plans for investing `10 trillion in highways and shipping sectors by 2019. The minister said that works worth `5 trillion would be undertaken in the highways sector in his current tenure while another `5 trillion would be invested in the shipping sector. The Government of India has approved a ring road project for Delhi entailing an investment of `6,000 crore. Work on the project will begin in a month. The ministry’s vision is to build a road network like those of advanced nations such as USA where people can travel 1,000 km in six hours. Meanwhile, the focus is also on rolling out stalled projects, bringing equity, allotment of terminated schemes, streamlining work and fast-tracking clearances.

The operators would be required to provide the necessary crafts along with utilities and undertake operations and maintenance of the same, it said, listing the components of the project as cruise vessel/hovercraft/catamaran/f erry craft, modern navigation equipment, utilities (including online booking, boarding and embarking and disembarking facilities), necessary water supply, IT systems, comfort system (including eateries and entertainment provisions), exhibition and advertisement, exhibit of local heritage and comprehensive tour packages.

requirements for navigation), nature of proposed facilities, requirement of enabling infrastructure, estimated capital cost, estimated implementation period, passenger potential, key circuits and routes along the coastline for development of terminals and proposed mode of project financing. In addition, it also needs to give complete information about the operator including annual turnover and experience. The Ministry of Shipping will initiate a detailed tender process after assessing the response of operators.

ILLUSTRATION ONLY/WWW.DIF.MP.GOV.IN

ADB loan for road project in MP PM NEWS BUREAU he Government of India and Asian Development Bank have signed an agreement for a $350-million loan to upgrade district roads in Madhya Pradesh in central India. The Madhya Pradesh District Connectivity Sector project will improve about 1,600 km of major district roads in the state through lane widening, surface improvements and strengthening of culverts and bridges. Tarun Bajaj, Joint Secretary (Multilateral Institutions), Department of Economic Affairs, Ministry of Finance, who signed the loan agreement on behalf of Government of India, said that the project would lead to improved road transport connectivity in Madhya Pradesh through reconstruction and rehabilitation of major district roads to allweather standards. The project will have innovative elements like creation of State Highways Fund on PPP model, toll plus annuity on hybrid model of BOT-Toll and BOT-Annuity, and border check-posts on PPP model to increase revenue and control overloading and damage to state roads. In addition to improving the roads, the project envisages the inclusion of a five-year performance-based maintenance contracts integrated as an adjunct to the construction contracts, to ensure road assets are constructed to higher standards and well maintained after initial work is completed. ADB’s loan will cover 70 per cent of the total project cost of $500 million, with the Madhya Pradesh government providing the balance of $150 million. It is expected to be completed by April 2018. Madhya Pradesh has a road network of about 127,000 km, including 4,700 km of national highways, 11,000 km of state highways, and 20,000 km of major district roads. Rural roads make up the balance.

08-09] Voestalpine Ad + Special Report.qxp

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Projectmonitor, Mumbai, March 1-15, 2015

08-09] Voestalpine Ad + Special Report.qxp

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SPECIAL REPORTS

Projectmonitor, Mumbai, March 1-15, 2015

First-ever PPP in hydropower recoils VENUGOPAL PILLAI

ILLUSTRATION ONLY

ndia’s attempt to deploy the public-private partnership model in the hydropower sector has failed after it found no takers. The 210-MW Tuivai hydropower project of the Mizoram government that was to come up under the viability gap funding mechanism under the PPP modality will now be implemented by central PSU North Eastern Electric Power Corporation Ltd. In November 2013, the Empowered Institution under the Department of Economic Affairs approved the Tuivai HEP to be developed with a total project cost of `1,700 crore including a VGF component of `340 crore. The Mizoram government was to have a 49 per cent equity stake in the project with a prospective private developer holding the controlling 51 per cent equity stake. The state government would provide land and ensure all clearances while the private developer was the construct the project in six years, and operate it under a concession period. Till October 2014, there was no taker for the project, despite extensions to the submission date. One of the main deterrents is understood to be the condition that the private developer could not increase the power tariff under the entire concession period of 35 years (including construction period of around six years.) The Joint Electricity Regulatory Commission of Manipur and Mizoram

had fixed the power tariff at `3.55 per kwh. Apart from being India’s first hydropower project in PPP mode, the Tuivai project is also Mizoram’s largest hydropower plant till date. It is coming up near Ngopa village in Champhai district of the state. Conceived in 1995, the Tuivai project, envisaging a 155m tall dam, has been mired in delays. It has also been facing opposition from local groups, especially the Hmar People’s Convention, an erstwhile militant outfit turned

political party, active in the Hmar tribe dominated regions of north Mizoram. HPC has been protesting against the submergence of 1,600 hectares of agricultural land in seven villages near the project site. Speaking to Projectmonitor, a senior Neepco official said that the Tuivai project was initially supposed to be implemented by Neepco but was later converted by the Mizoram government into a PPP project with VGF funding. However, with no takers, the project had returned to Neepco, he

said. While no implementation schedule has been drawn up as yet, the official maintained that power from the project would be shared with other northeastern states as well. Interestingly, if the project were implemented under the PPP mode, Mizoram would have had access to the entire power generated. Headquartered in Shillong, the capital city of Meghalay, Neepco is entrusted with developing hydropower and thermal power projects serving the entire northeastern region.

Unlike conventional thermal power plants, large hydropower plants—especially those that envisage storage facilities— often tend to face project delays. Such projects contend with implementation challenges arising out of difficult topology, natural calamities like flash floods, etc. Moreover, there is almost always social resistance owing to potential displacement of people. Hydropower projects therefore cannot generate returns on investment as predictably as their thermal counterparts could. Due to these factors, large hydropower projects are usually exempted from the public-private partnership philosophy or, for that matter, from even the tariff-based competitive bidding mechanism. Meanwhile, Mizoram, according to information available on its Power & Energy Department website, has 11 hydropower projects aggregating 29.35 mw in operation. (This excludes the share of Mizoram in central PSU power projects.) With capacities ranging from 300 kw to 12 MW, these projects have been commissioned between 1984 and 2010. While the 210-MW is the biggest project planned, in terms of capacity, Mizoram is also working on the 460-mw Kolodyne-II project for which an MoU has been signed with NHPC Ltd. Mizoram’s hydropower potential has been assessed at 4,500 mw out of which only 0.6 per cent (or 29.35 mw) has been tapped so far.

Project Cost Index increases marginally DR. M.S. KAPADIA verage project cost, as measured by ERIL Index of Cost of Project Inputs, increased nominally during January, ending decline of previous two month. Project cost escalation on y-o-y basis worked out to 0.7 per cent during the months, a half of an already subdued 1.6 per cent during the comparable period of 2013-14. WPI-based inflation for all commodities showed a decline during January, after over five years of positive growth. The combined WPI for manufactured products that sets the tone for project investment increased 1 per cent annually. Computed by Economic Research India Pvt. Ltd, ERIL Index measures project cost escalation in terms of WPI of material inputs relevant in project construction. Capital goods production increased 4.8 per cent during AprilDecember Among the other material inputs in project execution, cement production increased by 7.9 per cent. Alloy and non-alloy steel production was up by 1.6 per cent during this period. Machinery export

increased by 16 per cent, whereas their import was up by 2 per cent.

Trends during January The aggregate WPI for non-metallic mineral products rose by 0.6 per cent during the month due to higher price of grey cement (2 per cent) and asbestos corrugated sheet, glass bottles and bottle ware and lime (1 per cent each). However, the price of bricks and tiles declined 4 per cent, marbles 3 per cent, and slag cement 1 per cent. The total WPI for basic metals, alloys and metal products declined by 0.1 per cent due to 5 per cent decline in price of slabs, 4 per cent in pig iron, 2 per cent each in zinc and steel structures; and 1 per cent each in ferrosilicon, steel rods, CRC, angles, rebars, silver and HRC. However, the price of iron castings was up 4 per cent, nuts, bolts, screws and washers 2 per cent, and pipes, tubes, rods and strips, gold and gold ornaments, sheets, plates and billets 1 per cent each. The combined WPI for machinery and machine tools increased by 0.2 per cent following higher price of heat-

ERIL INDEX OF COST OF PROJECT INPUTS: JANUARY 2015 Wholesale Price Index: 2004-05=100 Y-o-Y Increase (%) Index 2015/14 2014/13 Non-metallic mineral products 172.9 4.0 0.8 Structural clay products 190.7 5.8 7.5 Cement & Lime 170.0 3.4 -2.4 Basic metals, alloys & metal products 164.7 -1.0 0.7 Ferrous metals 154.4 -1.2 1.0 Non-ferrous metals 169.3 2.4 1.8 Machinery & machine tools 135.2 2.1 2.4 Industrial machinery 153.1 1.5 2.4 Construction machinery 141.4 3.3 0.3 Air-conditioners & refrigerators 120.7 4.3 1.7 Non-electrical machinery 127.6 2.7 1.1 Electrical machinery & batteries 139.0 1.2 2.6 Electrical Accessories, wires & cables 157.3 3.8 4.8 Transport equipment & parts 136.7 0.7 3.3 Automotives 135.7 0.2 3.6 Auto parts 139.1 3.3 2.6 Composite ERIL Index for project inputs 150.5 0.7 1.6 Overall WPI 178.3 -0.4 5.2 ing elements (5 per cent) and industrial furnaces, electric motors, thresher, electric generators, lamps, electronic

PCB, micro circuit, washing laundry machines, earthmoving machinery, and ball and roller bearings 1 per cent

Increase Since March (%) 2014 2013 3.2 -0.1 3.4 7.5 3.6 -4.6 -1.7 1.0 -2.2 1.0 1.7 2.4 1.5 2.3 0.9 2.2 2.8 0.1 1.1 1.8 2.6 1.4 0.4 2.5 3.8 8.3 0.7 2.7 0.4 2.8 2.2 2.5 0.1 1.9 -1.1 5.3

each. However, the price of heat exchanger dropped 6 per cent over the month.

10-11] Project Finance & Management.qxp

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FINANCE & MANAGEMENT

Projectmonitor, Mumbai, March 1-15, 2015

ANTHONY AZAVEDO

Project finance has witnessed explosive growth in the past few years. Its emergence has resulted in number of favourable trends like privatisation, deregulation of industries and new attitudes towards the role of private sector. Despite this success, certain underlying challenges remain about project finance as the financing vehicle of choice, says R. Balaji - Vice President, Finance and Treasury Head, Technip India Ltd.

he past decade has not been easy due to erratic markets and a complex web of new regulations and compliance issues. This has forced the finance function to redefine its role in the organisation to face rapidly changing market and economic conditions. From providing more insightful business intelligence and forecasting, anticipating and responding to sudden market disruptions, today’s finance professional is expected to be a business strategist and a financial expert by transforming their functions to deliver efficient as well as effective services. While the global financial crisis and economic downturn have made these tasks even more complex and challenging, they have also underlined the fundamental importance of the role. Against this backdrop, let us look at the project financing scenario and its challenges:

Current scenario Although portrayed as a new financing technique, project finance is actually a centuriesold financing method. With the explosive growth in privately financed projects in the developing world, the technique is enjoying renewed attention. The purpose of this note is to highlight the advantages and disadvantages of project finance and explain the myriad of risks involved in these transactions and to raise questions for future research. The basic characteristic of project financing is the use of

ing to projects for the value of exports that the project generates for its home country. ECA participation has increased rapidly to an estimated $10 billion a year over the past four years. ECA participation bolsters a project’s status and gives it a certain amount of de facto political insurance. Today, most of the major European and Asian ECA’s support large tied facilities and also, on a case to case basis, offer refinance for amounts already disbursed to fund equipment contracts.

Making project financing easier Financing infrastructure projects, especially in developing countries, entails a formidable set of risks. It is the role of the project finance advisor, the project sponsor, insurer and the legal advisor to structure the financing in such a manner that mitigates these risks. Lenders and investors are always concerned about financing immobile assets in distant, politically-risky areas of the world. They are naturally related and it is possible that

Redefining project financing the project’s output or assets to secure financing. The essential aspect of project financing is the finite life of the enterprise. In corporate finance terms, this amounts to mandatory liquidation as a fixed dividend policy rather than reinvestment. Project financing has evolved through the centuries into primarily a vehicle for assembling a consortium of investors, lenders and other participants to undertake large and long gestation projects that would be too large for individual investors to underwrite. Prominent examples are construction of infrastructure like roads, telecom and power plants around the world as the governments face budgetary constraints. The common features of project finance transactions are: Capital-intensive: Project financing tend to be for largescale projects that require significant debt and equity capital. A World Bank study in 1993 found that the average size of such infrastructure projects in developing countries was $440 million. Highly leveraged: These transactions tend to be highly leveraged with debt accounting for 65 per cent to 80 per cent of project cost. Long term: The tenor is generally for 15 to 20 years. Independent entity with a finite life: Similar to the ancient voyage financing, project financing rely on a newly established legal entity (project company) whose sole purpose is for exe-

cuting the project with a finite life. For e.g. in a BOT project, the company ceases to exist after the project assets are transferred to the transferee company. Non-recourse or limited recourse financing: As new entities do not have credit or operating histories, lenders focus on the project’s cash flows. Thus, it takes an entirely different credit evaluation or investment decision process to determine the potential risks and rewards of a project financing. Lenders work with engineers to determine the techni-

cal and economic feasibility of the project.

Challenges

Raising capital for large and long gestation projects requires significant lead time for getting approvals from various agencies. Expensive and time consuming, as special purpose vehicles are to be formed. Greater need for information, monitoring and contractual agreements thus increasing the transaction time and costs. The highly-specific nature of the financial structure also

reduces the liquidity of the project’s debt. Margins for project financing include premiums for country and political risks. Lenders have recourse only to the assets and cash flows of a specific project. The contractual arrangements often prescribe intrusive supervision of the management and operations. Prohibition of foreign legal firms from practicing in India.

Evolving trends

Capital markets: Number of capital market issues for infra-

structure projects have been completed through the private placement route. The capital market route can be cheaper, less restrictive and for longer periods than commercial bank lending. Generally, offer fixed interest rates and access wider pool of investors such as pension funds. Credit ratings make the capital market route much smoother and transparent. Direct equity investment funds: Private Equity funds raise capital from a limited number of large institutional investors. They screen a large number of projects for potential investment opportunities. The funds typically take minority stakes in such projects. Multilateral agencies. The World Bank, IFC and regional development banks often act as lenders or co-financers to infrastructure projects in developing countries. They also play a facilitating role to improve the regulatory frameworks for broader participation by foreign companies and local private sector. Apart from concessional financing, they provide further assurance to lenders that the local government and state companies will not interfere detrimentally with the project. Export credit agencies: Infrastructure projects in developing countries require imported equipment and the ECAs are approached by contractors for support. Generally ECA’s provide a loan guarantee or fund-

Piramal Fund Management enters construction finance

Khushru Jijina, MD, Piramal Fund Management PM NEWS BUREAU ollowing the announcement of its intention to enter the construction finance space in Q3 FY15, Piramal Fund Management recently announced that it had approved nine construction finance proposals totalling `1,100 crore, a company release said. The initial transaction volume is spread across Mumbai, Delhi NCR, Bengaluru, Pune and Chennai, with projects located in micro markets with robust demand fundamentals. The funds have been ear-

marked across a combination of late stage, mid-market residential developments in both city centric as well as suburban locations. In one instance, funds are also intended for construction of a brownfield commercial office development. These facilities range from three to five years each, with a sufficient principal moratorium period to allow the project cash-flows to stabilise. Piramal Fund Management said it was capable of catering to the entire capital stack – right from early stage equity to late stage debt and now construction finance and was therefore able to act as a perpetual provider of capital within this space. Typically, structured equity or structured debt investments would often get refinanced by banks or other NBFCs once the projects would achieve certain milestones; with construction finance, the platform is able to extend the overall

tenure of their relationship with a project by not requiring the development partner to refinance once the project matures. Khushru Jijina, Managing Director, Piramal Fund Management, said, “With construction finance, we have consciously completed the last remaining element in our suite of product offerings. This makes sense for our platform as well as for our development partners as we are now able to further our engagement with them and fund the entire project life. We are looking at many more such investments where the developers are experienced, projects are profitable and de-risked, and our investment is ring fenced.” Piramal Enterprises Ltd is one of India’s large diversified companies, with a presence in healthcare, healthcare information management and financial services. PEL’s consolidated revenues were $750

million in FY14, with approximately 70 per cent of revenues from outside India. In financial services, PEL, through its Piramal Fund Management division, provides comprehensive financing solutions to real estate companies. Its Structured Investments Division invests in various sectors including infrastructure. The total funds under management under these businesses are around $2 billion. The company also has strategic alliances with top global pension funds like CPPIB Credit Investment, Inc. and APG Asset Management. PEL has also made long-term equity investments of around $1 billion in Shriram Group, a leading financial entity. In healthcare, PEL is a leading player globally in CRAMS (custom research and manufacturing services) and in the critical care segment of inhalation and injectable anaesthetics.

some overlap may exist between categories.

Conclusion Project finance has witnessed explosive growth in the past few years. Its emergence has resulted in number of favourable trends like privatisation, deregulation of industries and new attitudes towards role of private sector. We are witnessing enormous crossinvestment streams. There is an increasing array of investors coming from new and different locations and investing in new and different locations. Despite this success, certain underlying challenges remain about project finance as the financing vehicle of choice: Proper allocation of risk to the parties Critical evaluation of political risk and provision for risk premium. Understanding how the investors and lenders evaluate and quantify the risks. How to inject formulaic approaches for reducing transaction costs. Obtaining Credit Rating for completion of the financing faster and at better rates. Both academic and popular literature on project finance is scarce. However, the growing number of projects being financed throughout the world is rapidly providing a stockpile of case studies for further research. Their successes and failures will generate additional questions about this time-tested financing technique.

ANTHONY AZAVEDO

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ANTHONY AZAVEDO

cal and economic feasibility of the project.

Challenges

Evolving trends

Capital markets: Number of capital market issues for infra-

Piramal Fund Management enters construction finance

some overlap may exist between categories.

ANTHONY AZAVEDO

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ANTHONY AZAVEDO

Project-based companies face challenges of managing complex projects where each job looks similar and is in need of Enterprise Resource Planning that can provide a specialised solution for these companies, writes Sudheer Nair, Chief Executive Officer, eresource Infotech Pvt. Ltd, a leading enterprise solution company that provides end-to-end solutions that leverage technology-enabling customers to grow their business.

oday, ERP or Enterprise Resource Planning has become a widely accepted business application that integrates the diverse data and processes of a business into a unified system or process. To make matters more simple and clear, it is better to understand that ERP systems are a natural evolution of Material Requirement Planning (MRP) systems, and Manufacturing Resource Planning (MRP2) systems, that were basically related to manufacturing process. However, the effectiveness of integration and automation process in an ERP solution has promoted the application becoming the most suitable business tool in every industrial vertical. The case of project-based industries was not anything different. Project-based companies face challenges of managing complex projects where each job looks similar, but with a number of small differences. Actually, the project-based industry was badly in need of some good Engineering-to-Order (ETO) category ERP solution which could provide a specialised solution for these companies. It is not surprising that by now many large organisations have already realised they cannot do their business operations efficiently without an ERP system and all of them have already implemented one. The only difference is that some of them

Specific ERP systems for project industry have developed their own systems in-house under the supervision of a dedicated IT team. And others went for a third party system and implemented it into their infrastructures. However, there is some drawback to the whole episode as many of them deployed an ERP solution that has not been specifically developed for project-based industry and unless the companies go for an ERP that has been exclusively developed for project-based

industry, they may lack many of the features needed to handle project-based industry operations efficiently.

It is true that implementing ERP system in a large organisation is a costly affair and involves significant time and resources, especially when the system is internally developed or requires an important degree of customisation. While estimating the cost of an ERP system it is not just its develop-

ment cost but expenses like training costs, implementation costs, customisation costs as well as maintenance costs all must be considered. However, these factors can overcome if the company chooses an indigenous third-party ERP system that has been exclusively developed for projectbased industry. Companies like ours provide exclusive and affordable ERP solution for project-based industries.

ERP for project-based industry and its benefits In a complex project-based industry environment, such as: Oil & Gas Construction EPC Contractor MEP Contractor Architect Infrastructure Development You need sophisticated and intuitive business application tools to achieve your strategic objectives and ensure project efficiency. An ERP system that assists these project-based industries needs to record every service so that all the necessary precautions are being taken to comply with the requirements of every operation and other processes. Today, there are very effective ERP systems available in the ERP market that is designed exclusively for projectbased industries that maintains every record in a very effective manner. The system effectively deals with core functional areas, such as Project Monitoring and Control Sales Management and Tendering Bill of Quantities Purchase and Supplier Management Onsite Engineers Portal

Material Management Labour and Contractors Management Accounts Management Human Resource Management An ERP system for project-based industry could take care of every operation and maintains real time record of every activity that is taking place in the site or in the office. ERP solution provides comprehensive project information necessary to answer all of your critical business, investment, and operational questions. The system also enables the project-based industries to meet budget and deadline commitments by managing schedules, resources, and costs across all projects and programs.

Another misconception among the small and medium sized companies is that ERP is meant for only big organisations and they can postpone its usage till they have grown into the large scale. But this kind of mindset may cost them more in the long run. This is because as the amount of historical data grows, the more difficult ERP implementation may be. Over and above when a company grows it will have many additional processes being added into its business operations. In general most of the ERP system available in the ERP market today is scalable solution, meaning that it can grow as the business grows. It makes practical sense for a small business. These small companies can now go for ERP system with what they just need to manage their tasks, and upgrade to additional users and modules as the need arise. Why I advice this is because starting early could prevent future largescale ERP implementation headaches. I feel the decision makers in these small and medium scale industries must realise that not having an Enterprise Resource Planning system can make their employees in the company spending a significant part of their time trying to figure out the status of certain jobs in progress, instead of simply solving it through their computer monitor.

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PM NEWS BUREAU

espite significant increase in private investment in the power sector in Maharashtra over the past two decades, electricity distribution to the end consumer continues to be the weakest link in the value chain, says a World Bank report. While overall bank lending to the power sector stood at `4,883 billion in FY14, higher than overall bank credit to other infrastructure, lenders to the sector have chosen to lend even in the face of continued inefficiencies in the distribution segment. ‘More Power to India: The Challenge of Distribution,’ presented in Mumbai recently, is a review of the Indian power sector across key areas of access, utility performance, and financial sustainability. The study, conducted at the request of the Government of India, recommends freeing state utilities and regulators from political interference, increasing accountability, and enhancing competition in the sector in order to move it to

ILLUSTRATION ONLY/WWW.NTPC.CO.IN

POWER SECTOR

Banks can help to incentivise commercial performance a higher level of service delivery. It calls for a transition from administratively run to commercially run utilities. The power sector in Maharashtra has done relatively well when compared to other states. In 2013, the peak deficit stood at 8 per cent and the energy deficit at 2 per cent while elsewhere (e.g. in some southern states) the peak deficit was as high as 10 per cent. The average per capita annual electricity consumption in Maharashtra was 1,204 kWh in FY12 while the national average was only 971 kWh. The state has managed to plan its procurement well with only 5 per cent of power purchased through shortterm sources as against a national average of 22 per cent. There have been timely and adequate tariff revisions; generation and

transmission companies have been earning profits. However, there is scope for improvement electricity bill collection rate is low at 91 per cent and ATC losses were 22 per cent in 2013, in spite of the consumer mix being dominated by industries and commercial users, the study says.

Success story In Maharashtra, private investment has made significant contributions to the power sector. In generation, the private sector accounts for around 50 per cent of the total installed capacity. There are eight transmission licensees and multiple distribution licensees. Bhiwandi in Maharashtra, a textile hub of the country, is a success story of good manage-

ment of power distribution. Bhiwandi was reeling under severe power shortage in 2006 with no investment in system upgradation, inadequate metering, low collection and high losses. However between 2006 and 2011, the distribution franchisee in Bhiwandi managed to reduce the gap between average tariff and revenue realisation and is expected to break even soon. Technical losses declined from 58 per cent to 18.50 per cent through network strengthening; 38,000 connections were regularised and 17,000 new connections provided; more than 80 per cent of old meters were replaced by electronic meters; two new customer service centres were opened; and a 24x7 call centre and mobile van were introduced for quick response to consumer

KEY RECOMMENDATIONS

Utilities must be freed from government interference and their management professionalised. Despite corporatisation, utility boards remain state-dominated, are filled with administrators, and are rarely evaluated on performance. Banks/lenders should hold utilities accountable for efficient operation and apply collective pressure to not lend to those that are not credit-worthy. Regulators should go beyond the technical review of tariff petitions and focus on maintaining the health and integrity of the operations of the sector. Central government should pledge no future bailouts, give regulators autonomy and adequate resources, and hold them accountable for their performance. It should

also allow competition to create pressure for efficient operation. State governments should pay subsidies transparently, fully, and on time, when they mandate free power supply. They should insist on evidence that the subsidies are going only to intended recipients. Improve operational efficiency by tracking the delivery of power from purchase to delivery; ensuring that revenues are collected; facilitating payment of bills through different channels; ensuring that customer service issues are addressed in a timely manner; undertaking operations and maintenance activities routinely, and ensuring financial sustainability.

complaints. Maharashtra's experience with private participation in the power sector highlights the potential for improving distribution by enhancing accountability, as seen in companies investing in system strengthening, tightening their commercial practices, increasing efficiency and improving the quality of service, said Sheoli Pargal, Economic Advisor, World Bank, and author of the report. At the same time, with the sector’s reliance on commercial borrowings, lenders are well placed to incentivise performance since there could be ripple effects of shortfalls on lenders and, potentially, on the health of the financial sector. A history of state rescues seems to indicate that lenders do not adequately pressure distributors to improve their operational and financial performance, expecting to be paid back by the state, she added.

Key deterrents ‘More Power to India’ also highlights some of the key deterrents holding back private entrants to the power sector. On the generation side, there are uncertainties related to domestic and imported coal; the poor financial health of the distribution companies; and difficulties with physical pooling of imported and domestic coal among others. On the distribution side, some of the key deterrents include a high cost of

power relative to tariffs; a regulatory process that faces political pressures in discharging its responsibilities to the sector; a lag in implementation of open access; lack of clarity on models (licenses vs. franchises); no pressure to improve commercial orientation; poor governance; and utilities not being service oriented. While making an urgent call for change, the study recognises the many impressive strides that the sector has made over the years. Generation capacity has tripled between 1991 and 2012, boosted by the substantial role played by the private sector. A state-of-the-art integrated transmission grid now serves the entire country. Private distribution utilities in Kolkata, Mumbai, Surat, and Ahmedabad, which have been owned and operated by the private sector since before Independence, point to potential gains from private participation. Grid-connected renewable capacity has risen from 18 MW in 1990 to 25,856 MW in March 2013. And over 28 million Indians have annually gained access to electricity between 2000 and 2010. The study highlights the need for better targeting of domestic subsidies. Lack of effective targeting of such subsidies has led to anomalies such as economically weaker sections of the population ending up paying more for consuming less power.

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INSIGHT

Projectmonitor, Mumbai, March 1-15, 2015

Our Parliament is the sanctum sanctorum of Democracy. The people of India, particularly the poorest of the poor, have reposed unflinching faith in this institution for fulfillment of their hopes and expectations. My government will constantly endeavour for smooth conduct of legislative business. — Pranab Mukherjee, President of India

Solar installations down in 2014 ndian solar installations in calendar year 2014 totalled 883 MW, down 12 per cent compared to 1,004 MW installed in 2013. Mercom’s 2015 forecast is unchanged at approximately 1,800 MW with some upside. The Indian solar industry remains positive as solar programmes are being announced with increased frequency and the installation goal continues to grow. The 100 GW solar installation goal set recently by the Modi government has thrilled the sector, but the industry is pragmatic and realises that while 100 GW looks great on paper, the last five years have resulted in only 3,000 MW in solar installations, with last year’s installations at less than 1 GW. "Most of the industry is confused as they are constantly bombarded with new policies, goals, drafts and revisions," commented Raj Prabhu, CEO and Co-founder of Mercom Capital Group. "The last time the National Solar Mission conducted a solar auction was in October 2013; the industry just wants to see execution. The two most impactful steps the government can take to help the solar industry take off and bring substantial investments into the sector would be to fix the financial health of discoms and thereby improve the credit rating of offtakers, and classify "renewables" as a priority lending sector in India, making more funds available for solar." A large portion of 2015 installations are expected to come from the 700 MW Phase II Batch 1 projects, which are due to be commissioned in May year. Also, looking at the timeline for the last batch, it takes approximately 19 months from RfS (request for submission) approval to the commissioning date, which means that for 2016 to be a big year the next three months will be crucial for these policies to be finalised and RfS’ approved. The Ministry of New and Renewable Energy released another revised draft for Batch 2 for 3,000 MW of PV projects recently, and issued draft guidelines to set up 2,000 MW of grid-connected solar PV power projects under NSM Phase II Batch 3 - "State Specific VGF Scheme." Other solar programmes announced by MNRE include the plan to set up ultra mega solar power projects in 25 solar parks, each with a capacity of 500 MW or larger, targeting 20,000 MW of installed capacity over a span of five years beginning in FY 2014-15. Under Batch 5 (note: there is no Batch 4) the plan is to set up grid-connected solar PV power projects by the central public sector undertakings and organizations for selfuse or third-party sale, with viability gap funding over a span of three years from FYs 2014-15 to 2016-17. More than 300 MW of grid-connected and off-grid solar PV power projects are proposed to be set up by defence establishments with VGF in five years, from 2014-2019. MNRE has also launched a programme to develop 100 MW of grid-connected solar PV power projects on canal banks and canal tops.

Readers may mail their comments to editor@projectsmonitor.com

Editor Editorial Advisor Executive Editors

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Deputy Editors

DESIGN & PRODUCTION Art Director : Graphic Designers : Photo Editor

Shashikant Hegde Dr. M.S. Kapadia Prashant C. Trikannad Venugopal Pillai Renu Rajaram (Mumbai) Sandeep Menezes (Mumbai) Debdeep Chakraborty (New Delhi) Satish Kamath Nitin Parkar, Rajendra Vichare, Madhukar Ingavale Anthony Azavedo

Factory output slows down in December DR M.S. KAPADIA

ILLUSTRATIONS ONLY/WIKIMEDIA COMMONS

actory output increased 1.7 per cent during December, half the pace in the previous month, even as the rate was better than stagnation during this month a year ago. Manufacturing expanded 2.1 per cent and electricity 4.8 per cent, but mining eroded 3.2 per cent annually over the month. Capital goods index increased 4.1 per cent against 2.5 per cent decline in this month a year ago. Consumer non-durables increased 5.7 per cent (2.8 per cent); however, consumer durables remained in the negative zone. Basic goods (2.4 per cent) and intermediate goods (0.1 percent) indicated deterioration, relative to the feat in December 2013. Taking the cumulative data that would even out month-tomonth volatility, improvement in industrial production, though subdued, is evident. Total factory production index showed 2.1 per cent (0.1 per cent) increase during April-December period. Manufacturing expanded 1.2 per cent (decline of 0.4 per cent) and mining 1.7 per cent (decline of 1.5 per cent). Electricity rose 10 per cent, twice the rate in the comparable period a year ago. In mining, coal production increased 9.1 per cent, six times the pace during April-December 2013-14; the decline in crude oil and natural gas has got reduced. In manufacturing, five out of 22 major industries (at two-digit NIC levels) declined y-o-y during the first three quarters of the ongoing fiscal. The steepest decline of 55 per cent was recorded in radio, TV and communication equipment. Electrical machinery recorded 19 per cent increase, basic metals 11 per cent and other non-metallic

SALES & MARKETING Senior Vice President : Product Head : Manager - Sales : Assistant Manager - Sales : Coordinator :

INDEX OF INDUSTRIAL PRODUCTION (Y-O-Y % INCREASE) Mining Manufacturing Electricity Overall IIP Use-based classification Basic goods Capital goods Intermediate goods Consumer goods Consumer durables Consumer non-durables

December 2013 2014 2.6 -3.2 -1.1 2.1 7.5 4.8 0.1 1.7 3 -2.5 5.2 -4.6 -16.4 2.8

mineral products 5 per cent. Transport equipment increased 9 per cent. The growth rate in wearing apparel, dressing material etc. worked out to 18 per cent during December, against 20 per cent in November and 10 per cent in October. Refinery production increased 0.2 per cent during April-December. In use-based classification, basic goods index increased 7 per cent during the first nine months of ongoing fiscal, against 1.5 per cent during the corresponding period of 201314. Capital goods that cater to

2.4 4.1 0.1 0.7 -9 5.7

April-December 2013-14 2014-15 -1.5 1.7 -0.4 1.2 5.6 10 0.1 2.1 1.5 -0.4 3.1 -2.9 -12.9 5.8

6.9 4.8 1.7 -4.9 -15.2 2.2

project investment increased 4.8 per cent (decline of 0.4 per cent). Among the other material inputs in project execution, cement production increased 7.9 per cent, twice the rate in the similar period in 2013-14, whereas alloy-non-alloy steel production retarded from 11.5 per cent to 1.6 per cent. Intermediate goods increased 1.7 per cent (3.1 per cent) and consumer non-durables 2.2 per cent (5.8 per cent). Consumer durables, which include scooters, cars, gems and jewellery etc., sank deeper in red.

FROM OUR ARCHIVES Sanjeev Singh Abhishek Mishra Vijay Bhoir Bharat Metharamani Raghuvansh Pandey

CIRCULATION & SUBSCRIPTION Head - Circulation : Raju Chendavankar Support - Circulation : Anil Mungekar Subscription : Rosebin Mukadam Printed, published and Edited by Shashikant Hegde on behalf of Economic Research India Pvt. Ltd and published at Economic Research India Pvt. Ltd, Sterling House, 5/7 Sorabji Santuk Lane, Off. Dr. Cawasji Hormasji Street, Dhobi Talao, Mumbai 400002, and printed from Print Vision, 31, Jyoti Industrial Estate, Near Makhamali Talao, Noorie Baba Darga Road, Thane (West) 400601. Editor: Shashikant Hegde

Disclaimer: This magazine is for information purposes only. All rights reserved. All copyright in this magazine and related works is solely and exclusively owned by Economic Research India Pvt Ltd. No part of the contents of this newspaper may be reproduced in any form without the written permission of the Editor.While due care has been taken during the compilation to ensure that the information is accurate to the best of Economic Research India Pvt Ltd’s knowledge and belief, the content is not to be construed in any manner whatsoever as a substitute for professional advice. Economic Research India Pvt Ltd neither recommends nor endorses any specific products or services that may have been mentioned in this magazine and nor do they assume any liability or responsibility for the outcome of decisions taken as a result of any reliance placed on this document.Readers are recommended to make necessary enquiries before acting upon or entering into any commitment in relation to any advertisement published in this publication. Economic Research India Pvt. Ltd does not vouch for any claims made by advertisers of products and services. The Directors, Printer, Publisher and Editor of Economic Research India Pvt. Ltd shall not be held liable for any consequences, in the event such claims are not honoured by the advertisers.

July 16, 2002

Malpractices in project tendering ransparency is one ingredient totally conspicuous by its absence in the tendering process. Mystery continues to shroud T the exercise from the time the tender is floated till the final award is made. This is one of the major reasons for poor quality of services witnessed in works of government and quasi-government bodies. The associated malpractices, a natural fallout of these covert exercises, has kept many firms away from bidding for municipal projects or public works department projects. The stigma of being branded as a firm catering to these utilities also refrained many middle-level units from getting associated with these projects either as contractors or as sub-contractors. The proliferation of information technology and in particular the widespread usage of the Internet is thankfully putting an end to this. And what is even more laudable is to see the public sector enterprises taking a lead in putting up tenders online. Indian Oil, BHEL, NTPC and ONGC are some of the popular sites which are frequented by equipment vendors and contractors catering to the new projects market. Even international companies have started following this practice.

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GUEST ARTICLE

Projectmonitor, Mumbai, March 1-15, 2015

MULTI-WINDOW CLEARANCES

The biggest challenge for real estate development Single-window clearances are imperative to ensure realty projects are delivered on time and the government is also able to adhere to its deadlines on the ambitious Housing for All and Smart Cities projects, writes Ravi Saund, Chief Operating Officer, JMS Buildtech Ltd. ILLUSTRATION ONLY/WWW.JMSBUILDTECH.COM

ith the government having already announced ambitious plans to provide ‘Housing for All’ by 2022 and the creation of 100 Smart Cities in India, the real estate industry has high hopes that some of its issues will finally be resolved. One of the biggest challenges the industry faces is the multiplicity of approvals and clearances required from a plethora of departments and authorities. Real estate developers have been clamouring for a singlewindow clearance system to ensure projects are not plagued by time-and-cost overruns that have hobbled the industry for decades. Not only do these affect the viability of projects, they severely erode the industry’s credibility because delivering projects on time in such an ambience becomes virtually impossible. For example, it requires an average of 34 permissions to

secure a construction permit in India. In some states, these could add up to more than 50. Pursued diligently, it takes at least 227 days for all these permissions to come through. This tedious, tiresome and cumbersome process causes cost escalations of around 30 per cent or more, depending on other variables. Moreover, this does not take into account the myriad taxes and levies applicable on construction projects that further inflate the final costs of development. Naturally, developers have no option but to pass on the burden to customers. On the odd occasion, there have even been mid-stream levies by the authorities, which have forced developers to demand these payments from customers. This creates acrimony in the relationship between developers and customers, since the latter fail to understand how unforeseen charges can be

Aviation sector needs a million skilled workforce Rajiv Pratap Rudy, Minister for Skill Development and Entrepreneurship PM NEWS BUREAU million fresh skilled workforce will be needed in the aviation sector over the next decade, Minister for Skill Development and Entrepreneurship and Minister of State for Parliamentary Affairs Rajiv Pratap Rudy said recently. Speaking at Aero India 2015 in Bengaluru recently, Rudy said that there was great urgency in addressing the skill gaps in every sector, including the aviation and aerospace sector. In the aviation sector, nearly 80 per cent of skilled jobs would be needed over the next 10 years in the operations and MRO segments. The balance would be in research and development, manufacturing and maintenance. Construction, retail, infrastructure, auto and auto components, hospitality, and banking, financial services and insurance are some of the sectors where the skill gap is widest. Plans are also afoot to move school dropouts to make a lateral move into the skilling ecosystem and convert school dropouts into skilled workforce which will also be supported by a robust credit support system that will help finance the acquisition of skills.

levied by the government with retrospective effect. Such a situation arose a few years ago, when the authorities hiked the

levy on EDC (external development charges) at short notice and, consequently, builders were forced to pass on the burden to customers. With the total cost of each unit rising by hefty amounts, customers were understandably upset. Where multiple clearances from various authorities are concerned, what is not generally appreciated by customers is the fact that these clearances are ultimately secured—after months of running from pillar to post—only when palms are greased surreptitiously.

Considering the abysmal scenario of securing construction clearances in India, developers are keen that the government ushers a single-window clearance system at the earliest. This would mean streamlining the entire approvals systems, even moving the process online, and ascertaining that the dozens of permissions required are whittled down to a dozen-odd. Single-window clearance will ensure developers have to submit all papers to a single, nodal

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PM NEWS BUREAU

ABB sells 1 GW of solar inverters

BB India, a leader in power and automation technologies, became the first company to reach sales of a cumulative capacity of 1 GW solar inverters, a company release said. This milestone was marked with the rollout of an order for Tata Power Solar’s project for Kiran Energy Solar Power. ABB India commenced local manufacturing of solar inverters in 2012 and has since grown in partnership with key industry customers. Technology leadership complemented with competent indigenisation and reliable service, helped ABB India to quickly achieve and maintain pole position in the market over the last three years. The cumulative installed base for central inverters in India reached 3 GW in 2014. “Despite having the fifth largest generation capacity in the world, a third of our population has no access to electricity. We hope to be a key component in India’s solar powered future through our solutions spanning the entire solar value chain,” said Bazmi Husain, Managing Director, ABB India. “The ambitious target set for solar power generation capacity in the country, 100GW by 2022, makes it

PHOTOS: ABB

(Top) Bazmi Husain, Managing Director, ABB India. imperative to leverage all avenues available, be it 300 days of sunshine or opting for efficient and quality components

deployed across solar projects.” Changes were made in ABB’s product design keeping in mind the local requirements like

demanding environments of high temperatures, dust and humidity. Solar power has great potential to lead the charge of

renewables and is rapidly approaching grid parity in many countries. It is emerging to be a key contributor in the energy mix and the government’s drive to provide access to electricity for all. This positions ABB India well in an industry that is set for 10 percent plus annual growth in the country. “Being an early adopter of the latest inverter technology, we collaborated with ABB India from their initial years. Their understanding of the market and reliable product suite has made them a valuable partner in our operations,” said Dr. Arul Shanmugasundram, EVP - Projects and Chief Technology Officer, Tata Power Solar. “We look forward to a more comprehensive association in the coming years.” ABB is the leading global supplier of solar photovoltaic inverters, which play a key role in converting the sun’s energy into electric current. Solar inverters convert solar power direct current (DC) to alternating current (AC) for transmission and distribution. ABB solar inverters improve reliability, efficiency and ease of installations. The inverters range from 100 kW to 1,000 kW and are optimised for cost-efficient multi-megawatt power plants. One gigawatt (1 billion watts) is enough to power up to 750,000 households.

NEW PROJECTS These six new projects have been sourced from Project Alert, a group publication of Economic Research India Pvt. Ltd, which publishes 50 new projects across diverse industry groups every week. For more details, visit www.projectalert.biz SAW PIPES (KRISHNAPALEM) Promoter: New Savera Projects Pvt. Ltd Cost: `300 crore Industry: Articles of iron and steel Completion: N.A. Location: Visakhapatnam, Andhra Pradesh

New Savera Projects plans to set up a saw pipes unit with a capacity of 2.25 lakh tpa at Krishnapalem in Visakhapatnam district of Andhra Pradesh. Awaiting environmental clearance. Contact: New Savera Projects Pvt. Ltd, H No.3-179/NR, Plot No.179, Guttala Begumpet - S1, Kavuri Hills, Hyderabad, Telangana 500081. Tel: 040-49021234 Fax: 040-49021225

ROAD WORK (MUDDANUR-JAMMALAMADUGU) Promoter: Ministry of Road Transport and Highways Cost: `143.87 crore Industry: Roadways Completion: May 2017 Location: YSR, Andhra Pradesh

The project envisages widening and strengthening from km 513.00 to km 546.50 of Muddanur-Jammalamadugu section of NH-67 to two lanes with paved shoulder including four laning at 3.05 km (km 542.10 to 545.15) in Jammalamadugu Town section in Andhra Pradesh on EPC mode. On February 3, 2015, bids were invited and the last date of submission is March 20, 2015. Contact: Ministry of Road Transport and Highways, Government of India, Sai Nagar, Opp. Government Medical College, Viluppuram, Tamil Nadu 605201. Tel: 08554-274199

SAMALESWARI COAL MINE EXPANSION Promoter: Mahanadi Coalfields Ltd. Cost: `344.82 crore Industry: Coal Completion: N.A. Location: Jharsuguda, Odisha

COMMERCIAL COMPLEX (KHARADI) Promoter: P-One Infrastructure Pvt. Ltd Cost: `500 crore Industry: Commercial complexes Completion: N.A. Location: Pune, Maharashtra

The project envisages expansion of Samaleswari open cast coal mining capacity from 11 million tpa to 15 million tpa at Brajrajnagar taluka in Jharsuguda district of Odisha.

P-One Infrastructure plans to develop a commercial complex 'Eon Business Park' at Kharadi village, Haveli taluka, in Pune district of Maharashtra. Awaiting environmental clearance.

Contact: Mahanadi Coalfields Ltd, Jagriti Vihar, Burla, Sambalpur, Odisha 768020. Tel: 0663-2542461, 2542808, 2542779 & 2542095

Contact: P-One Infrastructure Pvt. Ltd, C/o. Panchshil Realty Pvt. Ltd, 191, Tech Park One, Tower 'E', Pune, Maharashtra 411006. Tel: 020-66473200/3000

PIPED WATER (KAHALGAON & PIRPAINTEE)

SAVANUR LIFT IRRIGATION SCHEME

Promoter: Public Health Engineering Department, Bihar Cost: `200.32 crore Industry: Water and sewerage pipeline and distribution Completion: November 2017 Location: Bhagalpur, Bihar

The project envisages implementation of a multi-village piped water supply scheme for Kahalgaon and Pirpaintee blocks in Bhagalpur district of Bihar. Bids have been invited and the tendering process is underway. Contact: Public Health Engineering Department, Bihar, Public Health Division, Bhagalpur, Bihar 812001. Tel: 0641-2400275

Promoter: Karnataka Neeravari Nigam Ltd. Cost: `494 crore Industry: Irrigation Completion: N.A. Location: Haveri, Karnataka

The project envisages implementation of Savanur lift irrigation scheme for 30 villages in Haveri district of Karnataka. Bids have been invited and the tendering process is underway. Contact: Karnataka Neeravari Nigam Ltd, Coffee Board Building, 4th Floor, No.1, Dr. B.R. Ambedkar Veedhi, Bengaluru, Karnataka 560001. Tel: 080-22283074 Fax: 08022386015 Email: knnl@knnlindia.com

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ORDERS & CONTRACTS

Projectmonitor, Mumbai, March 1-15, 2015

Gamesa to build 100-MW wind farm for CLP India C PM NEWS BUREAU

LP India, the largest wind power producer in India, and Gamesa, a global technology leader in wind energy, recently signed a turnkey project to construct a 100MW wind farm in Chandgarh, Madhya Pradesh, a company release said. The new wind project will increase CLP India’s wind power portfolio close to 1,100 MW spanned across six states: Rajasthan, Gujarat, Maharashtra, Tamil Nadu, Karnataka and now Madhya Pradesh. Rajiv Mishra, Managing Director, CLP India, said: “CLP India is the largest wind power producer in India and we are proud to announce our first project

L to R: Rajiv Mishra, MD, CLP India, and Ramesh Kymal, CMD, Gamesa India in Madhya Pradesh. We see enormous potential in the Indian power market, especially in the renewables field, and we are actively seeking new opportunities across the country to capture this potential.” As per the agreement, Gamesa will handle the entire infrastructure needed to set up and operate the wind farm, including installation of 50 new G97

2.0 MW turbines with extended hub height of 104 metres. The G97-2.0 MW–T104m turbine is specifically designed for Indian wind conditions at low wind speed sites offering low cost energy, thereby improving operational efficiency. The contract also includes a long term operation and maintenance service. Prior to this, Gamesa commissioned a 60-MW

BEL-Rolta selected for key defence project

Tata Steel has signed a contract to supply highly wear-resistant rail for the Crossrail project beneath the heart of London, UK. The Crossrail route will serve 40 stations and travel more than 100 km from Reading and Heathrow in the west, through new twin-bore 21-km tunnels below central London to Shenfield and Abbey Wood in the east. Tata Steel has already commenced deliveries to the Crossrail project, and will ultimately supply the project with more than 57 km of its heat treated, wear-resistant rail. In total 7,000 tonnes of Tata Steel rail will be used to create one of Europe’s largest railway and infrastructure projects. Sadbhav Engineering Ltd has emerged as the successful bidder for the tender by NHAI for four-laning of Ambala-Kaithal section of NH-65 in Haryana, from km 50.860 to km 95.360 (length km 44.500) with paved shoulder. The project has been awarded under NHDP Phase-III on EPC mode (Package-II). The length of the project is 44.500 km. The project cost is `459 crore and the construction period is 2.5 years while the maintenance period is four years. ITC has emerged the highest bidder for the Park Hyatt hotel at Cansaulim, owned by Blue Coast Hotels in Goa. It won the bid with an offer of `515.44 crore and it was equivalent to the reserve price set at the auction by the lender IFCI. The auction was initiated under the SARFAESI Act, 2002. Since 2013, IFCI has been trying to auction the 250-room luxury hotel in Goa, spread over 45 acres of land. After two failed attempts, IFCI invited fresh bids in December 2014. ITC has already remitted 25 per cent (approximately `129 crore) of the bid value. The residual 75 per cent will be paid within 15 days.

Mytrah signs wind power agreement with Andhra

PM NEWS BUREAU he exclusive consortium of Bharat Electronics Ltd and Rolta India has emerged as a development agency for the Battlefield Management System project. The `50,000-crore project was awarded by the Ministry of Defence. The BMS project is categorised as a ‘Make’ programme under the Defence Procurement Procedure. It is a situational awareness and visualisation system that aims to optimise the operational effectiveness of tactical units. Rolta will execute its role and responsibility in areas of BMS application software development and applicable licensing, GIS software and GIS data services. Also, Rolta will jointly work with BEL for manufacturing sub-systems for the soldier system, the overall system design, integration, installation, commissioning and maintenance of the BMS solution.

wind farm in Jath, Maharashtra, in March 2014 for CLP India. This new contract puts Gamesa’s 2014 Indian order intake at 850 MW. From January to September, India accounted for 27 per cent of megawatt sold by Gamesa, signifying its growing contribution in the Indian wind power market. “I am glad this project has further strengthened our collaboration with CLP India. Being a strong advocate for renewable energy resources, Gamesa’s effort in influencing positive climate change compliments that of CLP India’s and we are working together to lower India’s carbon footprint.” said Ramesh Kymal, Chairman and Managing Director, Gamesa India.

Ravi Kailas, Chairman and CEO, Mytrah Energy Ltd PM NEWS BUREAU

ytrah Energy Ltd, one of the largest independent wind energy producing companies in the country, has bagged a 220-MW wind power project from the Andhra Pradesh government, a news release said. The project will be installed in Kurnool dis-

trict and is expected to be commissioned in 18 months. The deal was signed at RE-Invest, India’s first renewable energy global investors meet in step with Government of India’s ‘Make in India’ initiative. “We are excited to sign the MoU with the Andhra Pradesh government and contribute to the larger

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energy requirements of the state and the nation,” said Ravi Kailas, Chairman and CEO, Mytrah Energy Ltd. “At Mytrah, we have successfully built an operating portfolio of 543 MW across seven wind rich states, in a span of four years.” The company has 300 MW under construction and 3,500 MW of identi-

fied projects in the pipeline. Mytrah Energy (India) Ltd, a wholly owned subsidiary of Mytrah Energy Ltd, has an operating portfolio of over 543 MW across Andhra Pradesh, Tamil Nadu Karnataka, Maharashtra, Gujarat and Rajasthan. MEIL plans to achieve 5,000 MW of wind power by 2019.

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NEWS

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India needs pro-growth structural reforms DEBDEEP CHAKRABORTY

ANTHONY AZAVEDO

tructural bottlenecks have increasingly weighed on growth of economic activities in India, according to a recently released report by the Organisation for Economic Cooperation and Development. The report titled ‘Economic Policy Reforms 2015: Going for Growth’ assessed and compared reform progress across countries and identified new priorities for reviving growth and making growth more inclusive. It said the pace of policy reforms had slowed in most advanced economies after a significant acceleration during the global economic crisis but pointed out that at the same time emerging economies were quickening the pace of reforms. In case of India, the report said foreign direct investment barriers had been reduced in sectors such as telecom, civil aviation,

railways, defence, construction and multi-brand retail. It noted financial reforms were being gradually implemented and the RBI had taken steps to increase

competition and efficiency in the banking sector, adding though that more needed to be done for achieving a more efficient allocation of capital.

The report identified several key areas where immediate reforms were essential in order to boost economic growth. It said India’s complex and long administrative and regulatory procedures and rules for acquiring land as well as starting or closing businesses burdened companies, in turn adversely impacting entrepreneurship, investment and growth. The report sought simplification of the rules and procedures and called for imposing maximum timelines on the regulatory approval processes. For speedier infrastructure development, it suggested monitoring of the

land acquisition law and a review in case the law failed to shorten the process of acquiring land. The report also recommended implementation of the single window clearance experiment more widely. Emphasising the need to undertake wide ranging financial reforms for promoting development of a dynamic and efficient financial sector that supported investment and inclusive growth, the report said bank portfolio restrictions should be eased including by gradually reducing the share of government bonds held by banks and establishing a plan to phase out priority lending. It also wanted the government to allow greater participation by foreign investors in the financial services sector and further promote entry of new private banks. The report opined that India’s labour laws were complex and stringent, particularly for large industrial firms. These laws, it said, reduced labour market dynamism, contributed to labour market duality and drove many workers including women into informality or out of jobs. Seeking simpler and more flexible labor laws that did not discriminate on the basis of size of enterprise, the report said the provisions requiring government approval to terminate employment contracts needed to be eased.

Prabhu proposes `8.56 trillion investment PAGE 4

Five-Year Plans The railway minister has also proposed a 2015-19 Railway Transformation Plan involving a capital outlay of `8.56 lakh crore. Over these years, Indian Railways will increase daily passenger carrying capacity from 21 million to 30 million, annual freight capacity from 1 billion to 1.5 billion tonnes, and track length by 20 per cent to 1,38,000 km. Some specific capex proposals: 77 new railway projects sanctioned at an outlay of `96,182 crore. 970 ROBs/RUBs to eliminate 3,438 level crossings (`6,581 crore). Fast-tracking sanctioned works on 7,000 km of double, third and fourth lines, and commissioning of

1,200 km during the year (`8,686 crore). 200 more stations to come under Adarsh Station scheme; Wi-Fi to be provided at ‘B’ category stations. 9,400 km of doubling, tripling and quadrupling works proposed. Developing 10 satellite railway terminals in major cities. Installation of train protection warning system and train collision avoidance system on select routes. Lifts and escalators at major stations (`120 crore). Construction of longer loops, smaller block sections, bypass lines and augmenting terminals (`2,374 crore). Coastal Connectivity Programme in partnership with ports for Nargol, Chharra, Dighi, Rewas and Tuna.

Centre fast tracks Arunachal HEPs

ith an aim to fast track environment clearance for hydropower projects in Arunachal Pradesh, the Ministry of Environment and Forests has given the green light to a 1,200-MW project on Lohit river and is set to consider for clearance a 3,097-MW hydro project in Dibang Valley later this week. The Expert Appraisal Committee of the ministry recommended environment clearance for the 1,200-MW Kalai-II hydropower project of Reliance Power subsidiary, Kalai Power. The 3,097-MW Etalin hydro project has been listed by the ministry for the next EAC meeting.

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ILLUSTRATION ONLY/WIKIMEDIA COMMONS

Centre seeks to improve mobility across highways W DEBDEEP CHAKRABORTY

ith a view to ease mobility on highways across the country, the Ministry of Road Transport and Highways has begun identifying projects where toll collection can be stopped. Considering that most toll plazas in the country still rely upon manual tolling systems, toll col-

lection leads to congestion, long queues of vehicles, delays, additional fuel consumption and pollution of the environment. A 2012 joint study by Transport Corporation of India and Indian Institute of Management – Kolkata found that the average waiting time for vehicles at each toll plaza on high volume routes was almost 10 minutes.

In 2011, a study by CRISIL Research estimated that the fuel wastage by vehicles waiting at toll plazas amounted to `10 billion annually. The estimate was made taking in to account the 525 toll plazas operating on national and state highways at that time, the over 20,000 vehicles that crossed these plazas daily and queuing period of between five and ten

minutes for each vehicle to pay toll. The study said the vehicles collectively spent between 1,8003,600 hours at the toll plazas, and based on each vehicle’s fuel consumption of between 0.51 litre per hour, the daily wastage amounted to `36 crore. Addressing the inaugural session of the Indian Supply Chain Logistics Summit in the capital

Biggest challenge for real estate PAGE 15 Maharashtra State Road Development Corporation has received in-principle approval for several major infrastructure projects. These include WorliHaji Ali sea link, augmentation of Mumbai-Pune Expressway, bridges over Thane and Vashi creeks, freeway on Ghodbunder Road, smart cities along Mumbai-Pune Expressway, and inland passenger water transport. Besides, approval has also been given for setting up MSRDC India International, an international arm of the agency, to take up projects for implementation in foreign countries. Against the target of 6,300 km of road construction under various schemes of the Ministry of Road Transport and Highways during the current year, 3,038 km has been constructed till January 31, 2015. The ministry sought additional funds from the Ministry of Finance to accelerate the progress of work but the request was not considered. The government is taking various steps to expedite completion of projects including streamlining land acquisition and environment clearances, exit for equity investors, premium rescheduling, securitisation of road sector loans, close coordination with other ministries and revamping dispute resolution mechanism. National Highways Authority of India has invited bids for NH-73 section in Haryana on EPC mode. The scope of work is as follows: (i) Four-laning of Uttar Pradesh-Haryana border-Yamunanagar-Saha-Barwala-Panchkula section of NH-73 from km 115.400 to km 157.192 in Haryana. The project is estimated to cost `450.59 crore and the completion period is 2.5 years with a maintenance period of four years. (ii) Four-laning of Uttar Pradesh-Haryana border-Yamunanagar-Saha-Barwala-Panchkula section of NH-73 from km 70.830 to km 115.400 in Haryana. The estimated cost of this project is `481.45 crore and the project is scheduled to be completed in 2.5 years with a maintenance period of four years.

officer or authority, who/which would be responsible for overseeing all the permissions and approvals.

recently, Minister for Road Transport and Highways and Shipping Nitin Gadkari said his ministry was engaged in identifying projects with up to `100 crore investment where the cost had already been recovered or about to be recovered as well as those that had become unviable for toll collection. He added that so far 74 such public funded tolls had been identified with tolling already stopped at 61 of these. In case of projects with investment of less than `100 crore under the public-private partnership model, Gadkari said his ministry was exploring ways to shut down such toll plazas after addressing the post-contractual obligations. He pointed out that the Electronic Toll Collection system being introduced in the country would help bring down the waiting time for vehicles at toll plazas. In the coming three years, Gadkari said, trucks would be able to cover up to 600 km. per day. The MoRTH aims to facilitate seamless travel across all national highways through the ETC system. As of December 2014, 103 toll plazas out of a total of 350 had ‘Fast Tag’ lanes.

Vizhinjam fails to lure bidders PM NEWS BUREAU he multi-crore Vizhinjam International Seaport Project had failed to attract any bidders until February 20, 2015, the deadline for prospective private partners to place their price bids. However, none of the three firms and consortiums which had purchased the bid documents put in an appearance at the office of the Vizhinjam International Seaport Ltd. The UDF government in Kerala has now extended the deadline to March 25 for placing the bids. The government will also call a meeting of the bidders shortly. The state government had shortlisted five firms and consortiums, but only three, namely Essar Ports; a consortium of Srei Infrastructure and OHL; and Adani Ports, had purchased the RfP documents. The other two, Gammon Infrastructure Projects Ltd and a consortium of Hyundai and Concast Infratech, did not purchase the documents. Recently, the Centre agreed to provide Viability Gap Funding to the extent of `800 crore, the first in the country for a port project. On December 4, 2013, the government floated tenders for selecting a private partner, making it the fourth instance for this particular project since 2007.

Statement about ownership and other particulars of Project Monitor, Mumbai, as required under Rule 8 of the Registration of Newspapers (Central) Rules, 1956

FORM IV (See Rule 8) 1. Place of Publication 2. Periodicity of its Publication 3. Printer's Name Whether Citizen of India? Address

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4. Publisher's Name Whether Citizen of India? Address

: : :

5. Editor's Name Whether Citizen of India? Address

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6. Names and Addresses of individuals who own the newspaper and partners and shareholders holding more than one per cent of the total capital

Online system preference Putting such a system online will be the best way to speed up work and inject efficiency as well as transparency, while ascertaining that any delays in approvals are due to legitimate reasons. Deliberate delays will be obvious because the grounds for delay would need to be mentioned in an online system. Through such a streamlined system all the varied permissions should not take more than 60 days or so to finally come through. It should also be borne in mind that securing a construction permit does not end the saga of delays and disruptions. Between construction and final delivery of units, there are numerous other permissions at various stages of development that need to be procured by developers. While customers are definitely harassed due to repeated delays in delivery, developers are all the more harried because they have to bear the brunt from all sides. (This article was written prior to Budget 2015-16.)

Mumbai Fortnightly Shashikant S. Hegde Yes Economic Research India Pvt. Limited, Sterling House, 5/7, Sorabji Santuk Lane, Off. Dr. Cawasji Hormasji Lane, Dhobi Talao, Mumbai - 400 002 Shashikant S. Hegde Yes Economic Research India Pvt. Limited, Sterling House, 5/7, Sorabji Santuk Lane, Off. Dr. Cawasji Hormasji Lane, Dhobi Talao, Mumbai - 400 002 Shashikant S. Hegde Yes Economic Research India Pvt. Limited, Sterling House, 5/7, Sorabji Santuk Lane, Off. Dr. Cawasji Hormasji Lane, Dhobi Talao, Mumbai - 400 002 Economic Research India Pvt. Limited, Sterling House, 5/7, Sorabji Santuk Lane, Off. Dr. Cawasji Hormasji Lane, Dhobi Talao, Mumbai - 400 002

Shareholders holding more than one per cent of the total capital: 1. Madan Bahal : 154/B, 15th Floor, Twin Towers, Off V. S. Marg, Prabhadevi, Mumbai-400025 2. Shashikant S. Hegde : Adarsh Nagar, Building No.42, Room No.1276, Worli Colony, Mumbai-400 030 I, Shashikant S. Hegde, hereby declare that the particulars given above are true to the best of my knowledge and belief. Sd/. Shashikant S. Hegde Dated: 1st March, 2015 Signature of Publisher

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Published on 1st and 16th of every month W.P.P. Lic No.MR/TECH/WPP-22/SOUTH/2015 Regd No. MCS/030/2015-17 Posted at Mumbai Patrika Channel Sorting Office, Mumbai 400001 on 1st/2nd and 16th/17th of every month

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Technip installs unique platform for ONGC PM NEWS BUREAU

echnip, a world leader in project management, engineering and construction for the energy industry, announced that it had successfully installed the HRD process platform for Indian gas major ONGC Ltd, using its proprietary Unideck integrated topside float-over installation system for the first time in Indian waters. The unique feature of this installation method is that it performs the integrated production deck (topsides) installation in a single operation, thus saving installation time and lowering risks compared to some other traditional methodologies of multiple

Samik Mukherjee, Country Head and MD, Technip lifts of smaller modules. The topsides were designed by Technip in India for the float-over installation, using Technip's proprietary Unideck integrated deck installation system, with the support of Technip in France, which ensured the flawless execution of the float over operations. Samik Mukherjee,

The Unideck integrated topside float-over installation system permits installation in difficult sea conditions. Country Head and Managing Director, Technip in India, said: “It is a moment of pride for Technip in India to witness the installation of approximately 8,200 metric tonne integrated production deck onto the Heera field for our client ONGC. The HRD platform will help in increasing field exploration and development

activities, thus improving domestic hydrocarbon production.” From the deepest subsea oil and gas developments to largest and complex offshore and onshore infrastructures, Technip’s 40,000 workforce offer the best solutions and most innovative technologies to meet the world’s energy challenges.

Coal India to set up power plants PM NEWS BUREAU ublic sector Coal India Ltd is establishing two thermal power plants of 800 MW each at Sundergarh in Odisha at an estimated cost of `11,363 crore. An initial investment of `1,019 crore has been approved by the company to start the construction. The project will be set up by MahanaS.Bhattacharya, di Coalfields Ltd, a wholly owned subCMD, sidiary of CIL. Coal India Ltd CIL has proposed to invest `6,000 crore in 2015-16 as capital expenditure and aims to achieve one billion tonne production target. Coal India Ltd, the Maharatna coal mining monolith, has unveiled its roadmap to produce one billion tonnes of coal by 2019-20. With India’s projected coal demand hovering around 1,200 million tonnes by 2019-20, at an envisaged growth rate of 7 per cent, CIL is expected to chip in with one billion tonnes of which 908 million tonnes is the expected contribution from the identified projects. This was stated by S. Bhattacharya, Chairman and Managing Director, Coal India Ltd, while briefing newspersons recently. Bhattacharya said the process of identifying projects to share the balance quantity, to top up the one-billion mark, was underway. Two CIL subsidiaries, Sambalpur-based Mahanadi Coalfields Ltd and Bilaspur-based South Eastern Coalfields Ltd, were expected to play a pivotal role in CIL’s quest to attain its target with 250 million tonnes and 240 million tonnes, respectively. CIL is relying on timely completion of railway lines, land acquisition and green clearances.